Bitcoin and Cryptocurrencies
The concept of differentiating between Cryptocurrencies in general and Bitcoin in particular is not a new one, but it is amplified in every bear market. Below we’ll discuss why this distinction is important, what it means, and how it can help you.
Difference between Bitcoin and Cryptocurrencies
After nearly a decade and a half since it was launched, Bitcoin is still the dominant cryptocurrency in the crypto space. This is something that is continuously strengthening the position of the maximalists and brings them new followers. If the term “crypto” is used to describe the crypto market in general (including Bitcoin), this term also has another meaning, namely everything in crypto besides bitcoin.
From a maximalist’s point of view, Bitcoin is the only real cryptocurrency and the rest are just fake tokens to make a quick buck.
From a legal point of view, Bitcoin is the only cryptocurrency that does not represent a security or an asset, such as land or goods (although it is digital). Ethereum is debatable, even though Hinman’s 2018 speech mentioned that Ethereum is decentralized enough not to be considered a security.
In XRP, although its development was won for retail, it was lost on the institutional side, meaning that XRP is a security if it is offered to institutional investors, so the money of large institutions will not be able to enter XRP.
As for all other cryptocurrencies, their legal status has not even been discussed yet and that is why the safest currency for institutions to invest in is Bitcoin because it has absolute clarity from this point of view.
But why should us common people care what institutional investors are doing when we are part of retail? The answer is that there will be a lot of institutional money coming into Bitcoin in the coming years. And we can catch this train. A trigger point will be when the first Bitcoin Spot ETF is approved (probably in 2024).
Thus in 2023 the distinction between Bitcoin and Crypto deepened, and now we can observe this new type of discourse in numerous crypto publications or in the language of influencers.
In bull market people prefer altcoins rather than bitcoin because they perform better than bitcoin especially during altcoin season. Even if Bitcoin increases by 5 times, there are other cryptocurrencies that increase by hundreds, thousands and sometimes tens of thousands of times.
BUT when the party ends and a bear market comes, people lose a lot more in altcoins than in Bitcoin. Thus in the bear market people start to despise altcoins and convert to maximalism, or at least start to value Bitcoin more than before.
In bear market rallies, Bitcoin dominates and outperforms the altcoin average (although there are always exceptions, like PEPE and other micro-caps). For example, the performance of bitcoin in the first half of 2023 is almost +90%, while the average altcoins (TOTAL3) did not even half of this performance.
That’s why trust in bitcoin has increased and the distinction between bitcoin and crypto is more pronounced now. However, we are still in a bear market and it is possible that the price will fall further.
Is it worth buying bitcoin in 2023?
If the price is down, why not? In retrospect, it was a better idea at the beginning of the year than it is now. If we look at the previous years, the price of bitcoin was very good buying value during bear market dips. So probably whoever buys this year’s dips (buy the dip) will benefit in the next bull market, but the buying decision is up to everyone.
Is Binance still safe to buy Bitcoin?
There are many people still using Binance and probably if it doesn’t get pulled out of the EU completely you’ll still be able to use it without problems. But if you want an alternative to Binance, there are plenty to choose from.